The Metropolitan Council is expanding an innovative pilot program that aims to generate more housing for very low-income families with an unusual incentive for rental owners: rooftop solar panels.
The regional planning group's Solar-for-Vouchers program provides technical expertise and a 5 to 15% discount on the purchase and installation of solar panels to Twin Cities landlords who are willing to increase the number of apartments that allow residents with Section 8 rental vouchers.
The goal, said Met Council regional planner and solar adviser Cameran Bailey, is to combine the organization's expertise in promoting both affordable housing and renewable energy.
"We want to leverage things that are already available to us in a more impactful way," he said.
The program is likely the first of its kind in the nation and comes at a time of growing interest in renewable energy in multifamily housing and a deepening need for housing that's affordable to very low-income renters.
The council has staff members who are focused on both issues. Solar is in use at some of its Metro Transit and metro-area wastewater facilities, and it administers the state's largest Section 8 housing program, which provides federally funded rent subsidies to private property owners on behalf of very low-income renters.
Though thousands of rentals have been built over the past several years, the vast majority have been at market-rate rents, leaving voucher holders with few options. A prospective voucher holder who cannot find a rental within 120 days of receiving the voucher forfeits the opportunity. The council said that in 2019, only 56% of the families that received a voucher were able to find a rental before its expiration.
Bailey said he and Met Council senior researcher Baris Gumus-Dawes hatched the idea for the program nearly three years ago during a lunch meeting. While lamenting the challenges that face low-income renters — and the lack of incentives to encourage the private sector to provide more — they brainstormed to combine their policy-related skills in housing and renewable energy and built the program from the ground up.
"We didn't want to replicate something that was already done," Bailey said.
Last fall they started recruiting applicants at presentations, panels and webinars. Feedback indicated interest in a program providing free consulting services and bulk-buying discounts on the equipment.
Initially, the program was open to properties of a certain size in select suburbs that buy electricity from Xcel Energy. Based on strong interest from a broader range of rental owners, the council has expanded the program to include other utilities and to buildings in St. Paul and Minneapolis.
The expansion makes it possible for Ron Hendrickson to participate. He owns a 13-unit apartment building in north Minneapolis for very low-income renters with mental disabilities and other challenges. The rents are so low that he's constantly looking for ways to save money.
He also has been interested in finding ways of making his building greener, but he lacks the expertise or the time to manage the installation of a rooftop solar system. Though his renters pay their own utilities, he expects to cut the electric bills for the building's common areas in half, enabling him to make other improvements to the buildings and stave off rent increases down the road.
"You're not going to go green unless it's cost effective," he said. "This will help me offset my expenses."
Bailey said building owners who want to participate in the program, which has an application deadline of May 31, must agree to add a predetermined number of Section 8 units above and beyond those that are already in the program in buildings that can be no taller than five stories with at least five apartments. In addition, about 10% of the units in those buildings must already allow Section 8 renters.
The goal is to get five to seven property owners with 10 to 20 properties to participate, creating an additional 50 to 75 apartments that allow voucher holders, who often pay about 30% of their income on rent.
Bailey said that while most residents will not directly benefit from the program because they pay for electricity separately from their rent, there's an expectation that they'll benefit in other ways.
At Minnetonka Heights, a 172-unit apartment community in Minnetonka, building managers anticipate a 40% reduction in electricity consumption after installing solar panels on the rooftops.
"With that additional money saved, our property will be able to continue completing major improvements to improve property values and provide a strong community for our residents," said Sarah Walter, regional property manager for Heartland Realty Investors Inc. "It is also an opportunity to make our properties more energy efficient, save money, and help the environment."
Walter said she expects to add 15 additional units that accept vouchers.
"Our property in Minnetonka is a great fit for this program," she said. "We see high demand for affordable homes and limited supply."